Significant progress has been made in determining the downstream signaling events elicited by PTH binding to the PTH type I receptor (PTH1R), but these downstream signaling mechanisms do not seem to provide a satisfactory explanation for the anabolic effects of PTH on bone. Accumulated evidence indicates that PTH exerts its effects through local factors such as BMPs, Wnts or TGFbs. BMP ligand-receptor binding and signaling is inhibited by antagonists and extracellular membrane proteins, such as LRP5/6, sclerostin and noggin which bind to BMPs and prevent them from gaining access to their receptors Our data indicate that PTH induces osteoblast differentiation through phosphorylation of Smad1/5/8; we have found that noggin inhibits both PTH-induced phosphorylation of Smad1/5/8 and differentiation of bone marrow stromal cells (BMSC) to osteoblasts. Our data further suggest that PTH may enhance the phosphorylation of Smad1/5/8 by inducing the formation of a complex of PTH1R with LRP5/6 that is internalized by endocytosis. As siRNA knockdown of LRP5/6 stimulates Smad 1/5/8 phosphorylation, this endocytosis, which is inhibitable by either b- arrestin2 siRNA or chlorpromazine (an endocytosis inhibitor), suggests a mechanism by which PTH may increase the binding of BMP2 ligands to BMP receptors and integrate the signaling mechanisms spatially and temporally. This ternary complex also inhibits GSKb3 kinase activity thereby stabilizing the phosphorylated Smad 1/5/8 and enhancing the intensity and duration of the signal. Therefore, we hypothesize that PTH stimulates phosphorylation of Smad1/5/8 through LRP5/6 to induce osteoblast differentiation of BMSCs for the anabolic bone formation. PTH induces bone remodeling and changes the bone marrow microenvironment. This represents a major barrier to the successful identification of physiologically relevant mechanisms of PTH action that are specifically associated with osteoblast differentiation and anabolic bone formation. We have established the immuno-deficient Rag2-/- mouse model, in which Rag2-/- mice provides an osteogenic bone marrow microenvironment necessary for osteoblastic differentiation of BMSCs, whereas the BMSCs remain in the bone marrow and do not differentiate into osteoblasts in the Tgfb1-/-Rag2-/- mice. Thus, this model provides different bone marrow microenvironments, in which the effects of PTH-stimulated Smad1/5/8 phosphorylation on osteogenic induction of BMSCs can be examined. We propose to: 1) Characterize the mechanism of PTH-induced phosphorylation of Smad1; 2) Examine the effect of PTH on differentiation of BMSCs in the bone marrow microenvironment; and 3) Aim III. Examine the role of Smad1/5/8 phosphorylation in BMSCs in PTH anabolic bone formation. PUBLIC HEALTH RELEVANCE: Significant progress has been made in determining the downstream signaling events elicited by PTH binding to PTH type I receptor (PTH1R), but these downstream signaling mechanisms do not seem to provide a satisfactory explanation for the anabolic effects of PTH on bone. Our preliminary data suggests that PTH stimulates phosphorylation of Smad1/5/8 through LRP5/6 to induce osteoblast differentiation of BMSCs and anabolic bone formation. We propose to characterize the mechanism of PTH-induced phosphorylation of Smad1/5/8, which mediates PTH-induced osteoblast differentiation of BMSCs and anabolic bone formation.